Archive for August, 2010

I don’t want to be overly dramatic, but if the Ultramercial, LLC et al. v. Hulu, LLC, et al., decision (U.S. District Court for the Central District of California) (Ultramercial Decision) holds up on review at the Federal Circuit, the Bilski v. Kappos decision may become an unstoppable death star for any computer-related invention that hinges on an “abstract idea.”

The inventions at issue (US Patent 7,346,545 — US07346545) are both expressly claimed as methods for distribution of products over the Internet and are clearly and unequivocably limited to use with the Internet, an Internet web site and interactive messages. Although the claim could be more explicit, it would also be reasonable to interpret many of the steps specified in the claims as Internet-implemented. Notwithstanding the express limitations tying the invention to an Internet implementation, the Court found that the claims were not “meaningfully” limited to machine implementation and, accordingly, did not pass muster under the machine prong of the machine or transformation test. The claims also failed the transformation test as well according to the Court.

I think the following passage from the opinion fairly well sums up Judge Klausner’s thinking about the value of limiting claims to computers or computer networks in order to pass the machine test:

I have been a patent attorney since 1981 and have always been interested in software as a hobby, as an investor, as an entreprenuer, and most predominantly as an intellectual property attorney who has helped countless software companies establish the intellectual property procedures and protections they needed in order to try to build a viable enterprise. Along the way, I have recommended many different strategies to my clients running the gamut from giving away their code, making their code open source but subject to license restrictions, keeping their source code trade secret and licensing only object code under a restrictive license, and including sometimes a recommendation to make patent protection a core protection strategy. The approach a company takes will depend greatly on the demands of the industry they seek to compete in and the amount of risk the company must take to establish an ongoing concern.

Unfortunately, I have seen many of these start-up software companies go under — many after years of a hard fight to get traction. Not a single one ever died because they were sued for patent infringement or even because there was a danger of patent infringement or being sued. No, the real problem facing software companies, contrary to notions promoted by certain anti-patent organizations, is not the risk of infringing a patent but rather the risk of not being able to find any customers who want to buy, or sometimes even use, their software. As Bob Dylan sings in the song Workingman Blues, “Sometimes no one wants what we got, Sometimes you can’t give it away.” As Bob knows from experience, the first thing an author worries about is just getting someone to want their stuff, and if that ain’t happening, they won’t be worried too much about getting sued for infringement. The reality is that most of new innovation just can’t find profitable traction in the marketplace — not even enough “profit” to keep one programmer going. In other words, its the lack of sales that kills innovative new products, not software patents.

Is hell freezing over in Silicon Valley? Not that long ago it would have been unthinkable for Oracle to sue any company for patent infringement, much less a fellow Silicon Valley technology behemoth. Yet last week they did just that, leveling seven Java-related patents against Google’s Android software development kit. The patents, owned by Oracle America, are: United States Patents Nos. 6,125,447; 6,192,476; 5,966,702; 7,426,720; RE38,104; 6,910,205; and 6,061,520, originally issued to Sun. The complaint alleges that Google has been aware of Sun’s patent portfolio, including the patents at issue, since the middle of this decade, when Google hired certain former Sun Java engineers.

The Oracle patents (copies attached), some of which were filed in the early to mid 1990’s, all appear to cover various aspects the Java programming environment. So much for software technology moving so fast that patenting is a useless exercise.

Google is definitely in the cross-hairs lately: last month Apple leveled patent infringement charges against HTC, the manufacturer of smart phones that run Google’s Android operating system. That suit involved five Apple patents.

Things may be getting a little tense at black-tie events in Silicon Valley.

In this case, which put the “hurt” on patent holders with no relief in sight, the jury rendered a verdict of infringement of various claims of United States Patent No. 6,117,073 (“the ’073 patent” – 6117073) in favor of Golden Hour Data Systems, Inc. (“Golden Hour”) against defendants emsCharts, Inc. (“emsCharts”) and Softtech, LLC (“Softtech”). However, the district court subsequently granted Judgment as a Matter of Law (“JMOL”) of no joint infringement of claims 1, 68, 10, and 12-22 of the ’073 patent. (Click here for copy of Golden Hour Decision)

Golden Hour’s ’073 patent, entitled “Integrated Emergency Medical Transportation Database System” is directed to computerized systems and methods for information management services in connection with emergency medical transport, which is often performed by helicopter.Providers of such emergency medical transportation must collect and track large amounts of data for the purposes of dispatching transport, treating patients (clinical services), and also for billing. The systems of the ’073 patent provide for the integration of dispatch, clinical services, and billing data. The ’073 patent discloses a dispatch module, a clinical module, an administration module, and a billing module. By integrating record keeping, these systems seek to avoid the inefficiency, inaccuracy and potential adverse clinical results that come with redundancy in recordkeeping.

As if Congress anticipated Judge Michel’s op ed piece about the need to increase USPTO funding, Director Kappos reports on his blog this week that legislation has been passed by both houses that increases the Fiscal Year 2010 spending authority for the USPTO by $129 million, and that the President is expected to sign the bill into law shortly.

Director Kappos reports that this legislation will allow the USPTO to immediately take a number of actions that will benefit the entire IP community, including: hiring additional patent examiners; funding full overtime for patent examiners and support staff; accelerating patent examination process reengineering; and continuing to fully fund PCT contract work. Mission-critical IT projects to increase the effectiveness of every USPTO function will also be accelerated.

Congratulations to Director Kappos and the rest of the Government for this desperately needed funding.

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Check out a great article by Judge Michel (retired) published in the NY Times op-eds.

He notes studies showing that small businesses create most of the new jobs and that small businesses need patents to get venture funding. He is advocating getting the Patent Office more to catch up on the patent backlog and increase patent issuances, plus a tax credit for small businesses that get a patent.

The problem of long waits for examination is particularly bad for software patents and software companies, one of the most promising areas for economic growth in the future. Hopefully this issue will get the attention it has longed deserved.

The interim guidance published by the USPTO last month (see my postings of last week) noted that the day after deciding Bilski, the Supreme Court denied certiorari in Ferguson v. Kappos, U.S. Supreme Court No. 09–1501, while granting, vacating, and remanding two other Federal Circuit section 101 cases. The USPTO guidance surmised that the denial of certiorari left intact the rejection of all of Ferguson’s claims, and that although the Federal Circuit had applied the machine-or-transformation test to reject Ferguson’s process claims, the Supreme Court’s disposition of Ferguson made it likely that the Ferguson claims also run afoul of the abstract idea exception. As such, if you have not yet seen Ferguson’s claim 1, which is representative, here it is:

1. A method of marketing a product, comprising:

developing a shared marketing force, said shared marketing force including at least marketing channels, which enable marketing a number of related products;

using said shared marketing force to market a plurality of different products that are made by a plurality of different autonomous producing company [sic], so that different autonomous companies, having different ownerships, respectively produce said related products;

obtaining a share of total profits from each of said plurality of different autonomous producing companies in return for said using; and

obtaining an exclusive right to market each of said plurality of products in return for said using.

Clearly this claim does not require any physical steps per se, or require the use of any “mechanisms”, as its core limitations constitute the abstract concepts of marketing, obtaining exclusive rights and sharing profits.

Posted in Section 101 | Comments Off on A Quick Look at a Representative Claim in Ferguson v. Kappos, the “Other” Business Method Case Disposed of by the Supreme Court